- Rocket Lab’s $8 billion deal for Iridium will give it a global satellite network, millions of customers and highly valuable L-band spectrum
- Iridium CEO Matt Desch said the D2D smartphone market remains hard to size despite all the hype around connecting ordinary phones directly to satellites
- Unlike some newer D2D players chasing broadband to smartphones, Iridium is focusing first on narrowband IoT for low-power devices such as smart meters
Iridium CEO Matt Desch declined to get into the nitty gritty details of how Iridium became the acquisition target of Rocket Lab, but he acknowledged that “everybody’s been talking to everyone” in the industry for the past year or two, driven primarily by the direct-to-device (D2D) opportunity.
Eventually, Iridium and Rocket Lab agreed to terms that will see Rocket Lab acquire Iridium in a cash-and-stock deal valued at $8 billion. The deal pushes Rocket Lab deeper into space-based communications, pairing its launch and satellite manufacturing business with Iridium’s satellites.
Back to the D2D market. What started as a way to eliminate dead zones has blown into a battle of stratospheric proportions. Whether the D2D market is as big as everyone seemingly thinks it will be remains to be seen.
“I think it's really unclear still what the direct-to-device market will be. There are companies that have apparently launched some services, but it's not very clear how well they work, what they're going to cost, where they're going, what they'll look like in the future, and so it's kind of hard to measure exactly what the market will be,” Desch told Fierce.
Even mobile network operators have characterized D2D as a mostly rural solution. According to T-Mobile CEO Srini Gopalan, the use of T-Satellite is about 0.0002% of its total network usage and it’s primarily used in remote areas like national parks. T-Satellite is $10/month as an add on; it’s included in some premium tier plans.
Iridium is betting on D2D as well, but it’s taking a different path than Starlink, AST Space Mobile or Amazon Leo. It’s currently reprogramming its network to provide D2D narrowband IoT services for low-power, low-cost devices like smart meters and agricultural sensors. Live tests are underway now, with market launch targeted near the end of the year.
Rocket Lab as “mini SpaceX”
Rocket Lab, headquartered in Long Beach, California, is sometimes called a mini SpaceX, but Desch doesn’t use that term. Rocket Lab was founded out of New Zealand in 2006 by Peter Beck, who took the company public in 2021 through a merger with a special-purpose acquisition company (SPAC) named Vector Acquisition Corporation. Rocket Lab’s annual revenue in 2025 was $602 million.
Desch said he hopes to continue running the Iridium business as part of Rocket Lab, but it’s too early to say if the Iridium name will remain. It’s probably going to take a year to close all the regulatory approvals around the world. “It’s a big merger, so it has to go through all of that,” he said.
Similar to SpaceX, Rocket Lab manufactures and launches satellites. Rocket Lab also makes satellite components that it sells to other companies, which is different from SpaceX.
Space superpower
With Iridium, Rocket Lab will also offer a service, similar to what SpaceX does with Starlink, but it’s a different type of service. In a promotional video, Beck said the deal with Iridium provides a shortcut entry into the “space applications” business, making it a “fully integrated, self-launching space superpower.”
Desch echoed that sentiment. “The fact that it [Rocket Lab] has all the capabilities … is an advantage it has over everyone except maybe SpaceX/Starlink,” he said. “We're not going to call out exactly yet what businesses we are going to use that advantage for, but clearly it makes sense that it's being viewed positively by the market right now.”
Iridium’s L-band spectrum is extremely valuable because it’s global and signals can penetrate rain and other extreme weather, making it uniquely suitable for niche industries like maritime, aviation, government, military and oil and gas. The company operates a constellation of 66 low Earth orbit (LEO) satellites with 14 spares and serves 2.55 million customers around the world. Its total revenue in 2025 was $871.7 million.
The transaction will give Rocket Lab an immediate foothold in both proprietary and standards-based satellite IoT, safety-of-life services and positioning, navigation and timing (PNT). In the video, Beck said Rocket Lab intends to build upon Iridium’s scale into untapped markets and pioneer new space-based services.
D2D hype reminiscent of another time
For those who were around the industry in the 1990s, the D2D hype is somewhat reminiscent of the hysteria around the satellite phone space, which looked promising but ended up crashing and burning. Motorola was behind the first iteration of Iridium, which went bankrupt after trying to sell $3,000 satellite phones as ground-based cell phone networks offered far cheaper alternatives.
Desch joined Iridium as CEO in 2006. Before that, he was CEO of Telcordia Technologies after a stint at Nortel.
Today, “it feels a little bit like Iridium in the early days in 1995 when they were talking about a cell phone for the world and it was going to be huge. People didn't really care how much the phone cost and how big it was, whether it worked indoors or all that kind of stuff, and then it didn't,” he said.
That’s not to say it’s the same now as it was back then. “There’s some echoes, certainly, of that. It’s not the exact same thing … I don’t know if it’s going to go in the same direction, but I think it’s more about the exuberance for the whole space and satellite industry right now that is driving things like SpaceX valuations and all the billionaires and large companies that are getting into the race right now,” he said.
“Not a lot of success stories yet. Iridium was one of the few – at least, if you define success as profitable and generating cash,” he said.